from the would-be-useful dept

We've argued for years that broadband data caps are not -- as the industry would have you believe -- about stopping "data hogs" or making sure that people "pay their fair share," but rather about protecting provider revenue (or, really, secretly increasing fees without "increasing" fees). A recent study from the New America Foundation has now made it clear that broadband data caps are not at all about dealing with data hogs, but almost entirely about increasing revenue for the providers.

As this paper documents, data caps, especially on wireline networks, are hardly a necessity. Rather, they are motivated by a desire to further increase revenues from existing subscribers and protect legacy services such as cable television from competing Internet services. Although traffic on U.S. broadband networks is increasing at a steady rate, the costs to provide broadband service are also declining, including the cost of Internet connectivity or IP transit as well as equipment and other operational costs. The result is that broadband is an incredibly profitable business, particularly for cable ISPs. Tiered pricing and data caps have also become a cash cow for the two largest mobile providers, Verizon and AT&T, who already were making impressive margins on their mobile data service before abandoning unlimited plans.

The paper goes on to debunk the usual arguments in favor of broadband caps. Beyond noting that the cost to providing broadband by the big guys has gone down significantly (while cost to consumers has stayed steady or gone up), they also point out that the "congestion" argument doesn't make sense. They note that even if there was congestion, a data cap would not be the best way to deal with it.

An analogy to rush hour traffic is useful here. Rush hour delays are generally caused by a spike in simultaneous demand for road access. Local governments often respond to this traffic congestion by instituting carpool lanes during certain hours, or introducing variable peak pricing for tolls, where prices are higher during the traditional workday commute than at other times. Both of these examples are methods to reduce demand during the time it is highest. It would make little sense to try and limit the total miles residents drive in a month as a means to solve rush hour congestion. Such monthly mile limits would needlessly impact residents who drive when the road is empty late at night and do not contribute to traffic congestion. Yet this is logic being employed when instituting monthly data caps.Monthly data caps are a tool that decreases consumption at all hours of the day.

In fact, the report even points out that Comcast has quietly admitted to the FCC that it's caps have nothing to do with network congestion... even as it has argued in favor of them publicly by using the "congestion" argument. As we've pointed out over and over again, if you talk to the tech people at broadband companies, they admit that the best way to deal with congestion is to simply upgrade capacity, not try to choke off usage. And this report shows that, rather than do that, telcos have been going in the other direction:

The best way to resolve chronic network congestion in the long term is to invest and expand capacity. Yet, a review of the publicly available financial document for some of the largest ISPs in the country shows a decline in capital expenditures—the costs associated with building, upgrading and maintaining a network, such as construction, repairs, and equipment purchases—for their wireline networks.Many ISPs are spending less money on capital expenditures now, both as a ratio to revenue but also even in raw dollars,than they have in years past.

Given all that, it's great to see that Senator Ron Wyden is introducing a new bill to protect consumers against data cap abuse. One of the many issues we've raised with data caps is that users have no idea how much broadband traffic they use, and related to that, broadband providers are notorious for either not providing meters for usage, or providing ones that just don't work very well (or give you some sort of arbitrary number when you check). The new bill, the Data Cap Integrity Act, would do two key things:

Require tools be available for users to really measure and manage their broadband usage

Have the FCC establish standards for ISPs to make sure that they only use data caps to manage network congestion, rather than as a way to "monetize data in ways that undermine innovation."

The bill literally has a section entitled: "SMART DATA CAPS INSTEAD OF DUMB ONES" which reads:

SMART DATA CAPS INSTEAD OF DUMB ONES.—The Commission shall evaluate
a data cap proposed by an Internet service provider to determine whether the data
cap functions to reasonably limit network congestion in a manner that does not
unnecessarily discourage use of the Internet.

If we had a real competitive market for broadband, of course, this wouldn't matter. I'm still hesitant to support legislation telling companies how they can implement a business model. But, as we've been arguing for many, many years, there isn't real competition in the broadband space for most users, which is what allows broadband providers to get away with crap like using data caps to limit internet usage and increase revenue. Furthermore, given how much the industry has relied on government subsidies and rights of way, it seems only reasonable to think that some level of requirement to actually, you know, not screw over users, might be appropriate.

That said, the bill also has the following tidbit, which almost certainly dooms it from the start:

DISCRIMINATION OF CONTENT.—A covered Internet service provider may not, for purposes of measuring
data usage or otherwise, provide preferential treatment of data that is based on the source or the content of the data.

That's going to be interpreted as a backdoor attempt to put in place a net neutrality rule, which is more or less guaranteed to freak out the wing of Congress who insists that net neutrality is an attempt to take over the internet.

from the urls-we-dig-up dept

There are about 700 confirmed exoplanets that astronomers have indirectly observed. The Kepler Space Telescope has gathered a vast amount of data, and it suggests that there are probably planets orbiting nearly every star. Now that we know about all these planets, it's fun to speculate about how much life could exist on them. So here are just a few links for those of you who want to know where our alien neighbors might be.

from the of-course-it-was dept

We've talked in the past how the US Patent Office is really bad at getting it right with patents. This is supported by the fact that the vast majority of patents that are presented for a post-grant re-exam have some or all of their claims changed or rejected. That spells major trouble for anyone who believes that patents accurately tell the market what is allowed and what is not -- when the USPTO doesn't even seem to know itself. Even more troubling is when courts make rulings over patents while they're still being re-examined, as the ruling itself may depend on the validity of that patent. This has gone on for years. For example, in one of the most famous patent trolling cases, RIM paid out $612.5 million to NTP, even as the USPTO was in the process of rejecting those patents.

The latest news is that, upon re-exam, the Patent Office has now rejected all 21 claims in Apple's infamous "pinch to zoom" 7,844,915 patent. Apple and patent enthusiasts will rightly point out that this is just the first step in the process -- Apple still can and will appeal, and it's very likely that the Patent Office will eventually allow some (perhaps modified) form of the patent to live on. However, since that is one of the patents involved in the Apple/Samsung patent fight, at best this creates even more confusion, since no one knows what that patent will eventually look like. This makes the problem of defining the "boundaries" of what a patent covers even more ridiculous. We already know that so many patents are written broadly, and in a somewhat indecipherable manner, such that they can be applied broadly. But when the boundaries are also subject to the whim of whoever's desk it lands on, it suggests a real problem with the system. We shouldn't be handing out massive monopolies, worth hundreds of millions of dollars, based on the arbitrary judgment of some random patent examiner, when it appears that there is no objective standard at all, but rather a series of (historically bad) guesses. That's no way to build an innovative economy.

from the if-you-need-to-whac-a-mole dept

It's really quite ridiculous how much time, money and effort the various arms of the entertainment industry have spent trying to get certain countries to "block" The Pirate Bay. Every single time it happens, it seems to drive up traffic to the site. Those who want to use it don't suddenly decide "gee, now I'm going to start buying what I formerly pirated." They just think "where's a proxy to get to the site" and they find one easily enough because they're everywhere. The industry then goes on a wild goose chase seeking to take them all down which is impossible. So they get a few morale-boosting wins... and everyone still gets to go to The Pirate Bay. Couldn't that time be spent more effectively?

The latest is that, over in the UK, where BPI (the UK equivalent of the RIAA) was threatening to sue the leaders of the UK Pirate Party personally for setting up a proxy, the Party eventually shut it down knowing that the costs of fighting such a legal battle would be extreme and damaging.

But, of course, it's unlikely that actually stopped anyone from reaching TPB, which is available through a variety of other means. In fact, soon after the UK Pirate Party took down its proxy, the Pirate Parties in some other countries put up their own proxies (and, of course, there are tons of general proxies out there). BPI can try to go after these political parties in other countries, or it can demand that ISPs block those proxies also, but more and more will just keep popping up. And none of that will convince a single person to buy something they weren't planning to buy in the first place. It just makes you wonder what they think they're accomplishing.

from the nothing-nefarious-at-all dept

Back in 2010, we wrote about a report suggesting that Intellectual Ventures was using somewhere around 1000 shell companies to hide many of its patent shakedown attempts. For years, IV itself liked to say that it wasn't involved in any patent litigation directly (that changed not so long ago), but we had seen some IV patents showing up from some small patent trolls, where it was impossible to determine who actually controlled the patent or the lawsuits. However, at times, other companies have argued that the shell lawsuits were really IV in disguise.

A few months ago, we wrote about an attempt to crowdfund an investigation into all of IV's shell companies. While that attempt to raise money did not reach its goal, it has helped put renewed attention on IV's use of a massive number of shell companies. In response, IV has been trying very hard to play down the whole thing. It published a ridiculous blog post arguing that the use of thousands of shell companies is just a normal business procedure:

This is a common practice for asset management firms, and it’s just common sense. Do stock brokers broadcast tips to their competitors? Does Warren Buffet tell the world where he’s investing next? Does Disney broadcast which plots of land it is planning to buy for its next theme park? Of course not, and IV takes a similar approach to our investments.

Ah, sure, this is all to throw other companies off the scent of what IV is "investing" in. That makes sense if IV were actually an investment company, rather than a shakedown play. The idea that publicly stating what patents it owns would somehow "broadcast tips" to "competitors" is ridiculous. Who out there is really an IV competitor? No, what IV is almost certainly worried about is that, if the extent of its activities were known, there would be more fodder for real and necessary reform against trolling -- and, more importantly, it's worried about tipping off the companies it's about to go after. It's not about competition -- it's about avoiding a smart company going to court to get a declaratory judgment against IV, which they admit later on in the post:

Moreover, were we to publish the entirety of our holdings we, or any other company for that matter, could find ourselves mired down in a series of tactical declaratory judgments and reexaminations.

Shocking. Perhaps if you didn't go around demanding huge sums of money from companies with a giant stack of vague and overly-broad patents you wouldn't face a series of declaratory judgments and re-exams.

In fact, no one has ever suggested that transparency is needed in the real estate world, yet properties are routinely held in the name of holding companies. When it comes to property ownership, patents shouldn’t be held to a different of set of rules

Well, if property holding companies routinely used their assets to shake down every other real estate owner out there, perhaps there would be calls for the practice to end. Plus, sorry, patents are not "property" like real estate is property. And, in fact, this is the key to IV's entire business model. If patents properly delineated the boundaries of what the patents covered, there wouldn't be much room for trolling. But, instead, IV relies on the fact that patents are broad and vague and "might" apply to all sorts of things.

In response to an article about all of this, IV also claimed that anyone who wanted to know about what patents IV holds can simply "search the USPTO's public database." Of course, this is a snarky and misleading answer for a number of reasons. First, it ignores the shell company patents. Second, it assumes that the USPTO's search actually works well (it does not).

Thankfully, however, the good folks at PlainSite, who try to shine some light on the hidden corners of the legal system, decided to take Intellectual Ventures up on its offer -- and actually went through the data to see what was lurking:

Like all of the USPTO's on-line systems, the assignment database is a technological abomination--sadly ironic for the agency that effectively manages the nation's technology rights. (The USPTO does deserve credit for making raw XML data available through Google, which is where our project began.) It must be noted that Intellectual Ventures would have had a much harder time lurking in the shadows all these years if government information technology systems, such as the USPTO assignment database and different states' corporation databases, were kept up to par. In fact, its business model would likely be impossible, as the courts would be likely to label the company as a vexatious litigant if they only knew how many lawsuits it filed.

In the end, after digging through the database, PlainSite has identified -- and released for all your enjoyment -- the names of what appear to be over 2,000 shell companies, though they admit that some of them may be fully independent. But... many of them apparently had "some obvious overlaps" like sharing "managing corporations, telephone numbers, and other factors." Oops. They're hoping not to "crowdfund" the efforts here, but rather to crowdsource the data. As they note, they're spreading this information, because "we hope that Congress and the courts take notice of one of the largest racketeering schemes ever perpetrated on the nation, with some of its richest billionaires acting more like thugs than visionaires."

What's really amazing in all of this is the way that IV execs keep spewing highly questionable arguments for why they're not so evil, when all the data just keeps pointing in the other direction. You could almost respect the folks there if they just came out and admitted that they'd realized that there was a system that could be gamed, and they've gamed it to the tune of billions of dollars. But, instead, they keep trying to justify the company's entire model by completely denying reality.

from the there-are-more-options dept

We just wrote about how silly it is to argue that companies you pay for their services or software somehow treat you better or are more "aligned" with user interests than those who give you products and services for free. When you dig in on the subject, such claims don't make any sense. In both cases, companies have some alignment with users -- because without users, they're nothing -- and some alignment with trying to make themselves money. And sometimes those two alignments conflict, whether or not the user is paying directly.

Derek Powazek (random trivia: whose work inspired me to learn how to create a web page back around 1995 or 1996 or so) has an excellent take on the pithy and dismissive phrase that many often use to argue that free services treat users worse:

"If you're not paying for the product, you are the product."

It's pithy and clever... and wrong. Powazek dismantles the claim eloquently. He attacks the underlying assumptions in that statement. He highlights that "free with advertising" has been a pretty big business for a long long time, in which there's no indication that users were treated as "the product" or somehow treated poorly. And then there's the key one: this is not an either/or situation:

I’ve worked for, and even run, many companies in the last 20 years with various business models. Some provided something free in an attempt to build an audience large enough to sell advertising, some charged customers directly, and some did a combination of both. All treated their users with varying levels of respect. There was no correlation between how much money users paid and how well they were treated.

For example, at JPG Magazine we sold something to our audience (magazines, subscriptions, and ultimately other digital services) and we also sold ads and sponsorships (online and in print). We made it 100% clear to our members that their photos always belonged to them, and we had strict rules for what advertisers could do in the magazine. We also paid our members for the privilege of including their photos in the printed magazine (as opposed to Instagram’s new policy that they can use your photos however they want, even in ads, without paying you a dime).

This example is much more complicated than the black and white “you’re the product” logic allows. In some cases, users got the service for free. In others, they paid us to get the magazine. In still others, we paid them! So who/what is the product?

And just because you pay doesn’t mean you’re not the product. Cable TV companies take our money and sell us to the channels, magazines take our money and still sell ads, banks and credit cards charge us money for the service of having our money. Any store that has a “loyalty card” takes our money for products but gives us a discount in exchange for the ability to monitor what we buy. In the real world, we routinely become “the product” even when we’re already paying.

He also points out, as I have many times, that there are plenty of companies whose services you pay for who treat their users atrociously. And then points out what many of us have been arguing all along: there are all sorts of business models online. Some work in some cases, others work in other cases. But to argue that "free" services mean you're "the product" and thus not treated as well, simply isn't an accurate or realistic statement. So can we please agree to kill it?

from the we-don't-need-the-ftc-to-act-as-our-parents dept

Earlier this year, we were reasonably worried about the FTC's plan to expand COPPA. COPPA -- the Childrens Online Privacy Protection Act -- is one of those laws that appears to have the best of intentions. Who doesn't want to protect the privacy of children, right? But as with so many things, the unintended consequences of overprotection often outweigh the benefits. In practice, the existing COPPA, which puts significant additional burdens on sites that target children under 13, has meant that lots of websites simply ban children under 13 entirely. The end result isn't that children under 13 are more protected, but that parents teach their kids it's okay to lie and to sign up for sites when they're "underage." At the same time, this drives away lots of services that could be really helpful to children -- especially educational sites.

And yet... the FTC wants to expand COPPA, rather than fix its problems. While the new proposals are not as bad as some ideas that had originally been floated, there are still some significant problems with them. As CDT notes, the unintended consequences of the broad definitions could raise significant First Amendment issues:

...we are concerned that the updated definition of when a website is “directed to children” could expand COPPA's reach to general audience sites and confuse website owners as to whether these new rules apply to them. This uncertainty will likely prompt more sites to take advantage of the Commission’s new age-screening safe harbor, which could lead to many more sites demanding age or identifying information from all users before allowing access. Requiring age verification from every user runs counter to the First Amendment right to access information anonymously and increases the collection of potentially sensitive information generally. The new rule's uncertainty is magnified for third party plug-in operators, who may now be liable for the decisions of publishers to embed their plug-in on sites directed to children

To start, by deeming persistent identifiers as personal information per se, the FTC's new rule runs contrary to established U.S. privacy law: federal courts have unanimously decided that IP addresses do not allow the contacting of a specific individual.

Further, as Commissioner Ohlhausen's dissent notes, the COPPA statute does not allow the FTC to impose liability on sites that do not collect children's information merely because the operator may somehow benefit from an ad network or plug-in operator collecting information—provided the third party neither targets children nor shares information with the site operator.

If a third party becomes liable once a single employee "recognizes the child-directed nature" of a website—whatever that means—COPPA will become the worst kind of notice-and-takedown system: Would a single complaint—or tweet—from a parent or activist group create "knowledge?" Faced with the impossible task of predicting how the FTC might characterize each of the millions of sites on which ads or plug-ins might appear, operators will have to try to block advertising or plug-ins on sites that appears to be child-oriented. If they can't do that effectively, this potential liability may effectively kill behavioral advertising on any site that can't prove it isn't child-oriented—in other words, on small sites.

Thus, COPPA will now impact adult sites, denying publishers revenue and adult users the functionality that is increasingly provided by embeds. Thus, the FTC invites not only a statutory challenge but also a constitutional challenge similar to that which led the Child Online Protection Act (COPA) to be struck down.

Yesterday, the U.S. Federal Trade Commission (the FTC) promulgated new rules (effectively July 1, 2013) interpreting the Children’s Online Privacy Protection Act (COPPA), and the new rules are a real mess. They are riddled with innumerable ambiguities and questionable policy choices, and I could spend a decade or two trying to figure out how the new rules apply to different factual situations.

That's not a good thing -- unless you're a lawyer. As he notes, once again, the intentions may have been good, but the implementation is a disaster:

The FTC wanted to crack down on these COPPA workarounds, but in typical FTC fashion, it did so in a ham-fisted and marble-mouthed way.

Basically, we're talking about the usual "unintended consequences" of going overboard in trying to "protect the children!" It's a noble goal, obviously. But, speaking as a parent as well as someone who's aware of how these kinds of rules tend to limit innovation, I'd much prefer that the FTC actually stay out of the parenting business and leave that to me.

from the here's-your-award dept

As we wrap up 2012, I think it's an appropriate time announce the first annual "Most Incorrect Law Enforcement Action Of The Year" award (yes, I just made that up). While it would be obvious hyperbole to claim that law enforcement in general is somehow inept or evil, it's been a hallmark year for silly LEOs. We once again saw several countries attempt to make it illegal for citizens to film police in action, despite such filming often occurring in public places. We also discussed how the German government whoopsie'd its way into informing the world of all the ways it monitors its citizens. Seriously, if you're going to go all 1984 on us, at least have the capability to not shove it in my face. These are just a few examples we've seen this year.

That said, for the truly deficient aficionado, you just can't beat the Japanese police, who recently announced charges against the founder of 2Channel (the super popular Japanese forum site), named Hiroyuki Nishimura, because some users of the site have been found to discuss illicit narcotics. And it all appears to have stemmed from one nonsense news report on one single little 2Channel post.

Since last year 2channel, Japan’s largest internet forum, has been subject to pressure from Tokyo police. According to a January 2012 post by Avery (2channel Fights Police Pressure, So-Called “Viral Marketers”), the whole police investigation began after Fuji TV aired a sensational news report about drug dealers making posts on the site. The news report was aired only a few days after 2channel users helped organize street protests condemning Fuji TV’s alleged anti-Japanese bias.

"Their evidence for the drug trade was a single post from 2010 that used code words to refer to MDMA, marijuana, and cocaine….investigators are calling 2ch a “hotbed of crime” because moderators did not delete the single post from 2010. (Over 1,800,000 posts are made on 2channel every day.)"

So, let's get the obvious stuff out of the way, because then we can really have fun. 2Channel is Japan's largest internet forum. It's huge. Policing every post on it would be similar to owners of a private beach checking each individual grain of sand on their property. If such forums are going to exist, forum operators need to be protected from these kinds of charges in order to survive. On top of that, just as with Craigslist, dedicated law enforcement officers should be able to make at least some use of the forums themselves for their own activities, but not if they attack the site's owners.

Great, the normal stuff out of the way. Now let me explain why these charges are really stupid.

Nishimura will be charged with abetting drug dealing. However, some twitter users have pointed out that the statute of limitations for the drug law in question is 3 years, and Nishimura sold 2channel more than 3 years ago.

Oops. So charges are being brought against the guy who simply founded the site that someone else may have once used to talk about something illegal, even though he sold the site 3 years ago and the statute of limitations has expired. I'm certain Unites States LEOs will soon be bringing charges against the long-rotting corpse of E.L. Cord, founder of American Airlines, since terrorists used a plane of his to attack the World Trade Center. I mean, they really have no choice at this point, assuming they want to make a late entry into this year's "Most Incorrect Law Enforcement Action Of The Year" award.

from the must-pay-well dept

Over the last week or so, I've seen a number of folks in the usual crowd of copyright maximalists cheering on a new "paper" put forth by a group hilariously calling itself the Center for Individual Freedom, supposedly trying to establish the "constitutional and historical foundations of copyright protection." The "paper" (and I use that term loosely) itself does no such thing. It's a one-sided polemic about why copyright is property -- argued by selectively quoting a few historical claims, often out of context, and ignoring everything else. The six page document (quick read) was actually written by three lawyers... who admit that they work for the RIAA. The basic argument is that copyright is a "natural right," and that this idea was well established at the time of the Constitution. The framing, then, is that all the Constitution was really doing was codifying a natural right that all agreed was akin to property, and that this right cannot and should not be diminished or taken away.

To do this, the authors rely, almost exclusively, on some arguments that John Locke made. This is the go to move of copyright maximalists. Because John Locke argued that property rights were established as a result of one's labor, and thus a "natural right", and some of the founders were influenced by John Locke, voila, copyright was meant to be given as a natural right. As the paper notes:

The foundational premise of Locke's theory
is that all people have a natural right of property
in their own bodies. Because people own
their bodies, Locke reasoned that they also
owned the labor of their bodies and, by extension, the fruits of that labor.
When an individual catches a fish in a stream, he has a
right to keep that fish because but-for his efforts,
the fish would not have been caught. For the
same reason, an author has a right to his works
because his efforts made the work possible. Under Locke’s view, "[o]ur
handiwork becomes our property because our hands—and the energy, consciousness, and control that fuel their labor--are our property."

That is, "a
person rightly claims ownership in her works to the extent that her labor
resulted in their existence." If anything, under Locke's theory, intellectual property should be even
more worthy of protection than physical property. Land and natural
resources are pre-existing and finite, and one person's acquisition of a piece
of tangible property may reduce the "common" that is available to others.
Not so with tangible expressions: the field of creative works is infinite, and
one person's expression of an idea does not meaningfully deplete the opportunities available to others; indeed, it expands the size of the "pie" by
providing inspiration to others. Moreover, while tangible property such as
land and chattel is often pre-existing and acquired through mere happenstance of birth, intellectual property flows directly from its creator and is
essentially the "propertization of talent"--that is, "a reward, an empowering
instrument, for the talented upstarts" in a society.

Nearly all of this is misleading or out of context. Or just wrong. The idea that Locke was arguing that mere labor alone creates a property right is just silly. As Stephan Kinsella pointed out years ago, this argument makes little sense the more you think about it, as Kinsella demonstrates by talking about who owns a loaf of bread:

But creation of the loaf is not the reason why the baker owns it. He owns the loaf because he owned the dough that he baked. He already owned the dough, before any act of "creation"--before he transformed it with his labor. If he owned the dough, then he owns whatever he transforms his property into; the act of creation is an act of transformation that does not generate any new property rights. So creation is not necessary for him to own the resulting baked bread. Likewise, if he used someone else's dough--say, his employer's--then he does not own the loaf, but the owner of the dough does. So creation is not sufficient for ownership.

Creation is not sufficient for ownership. That should be obvious, but for some reason the paper assumes that it must be so.

Oh, and Locke actually had much more mixed feelings on copyright. As some have pointed out, back in Locke's time, there was the precursor to copyright, known as The Stationers' Company monopoly, which more or less later morphed into the Statute of Anne (the basis for much of modern copyright). Locke's opinion on the Stationer's Company Monopoly? Not good at all. He argued vehemently against it, and is widely credited by some for it not being renewed. While he did support some of the ideas that were discussed for the eventual Statute of Anne, many of his ideas were actually rejected when that bill came around. As has been noted elsewhere, the Parliament explicitly rejected an earlier version of the Statute of Anne that referred to it as a property right (which also made it unlimited), completely changing the text to note that it was for the promotion of learning.

The central plank of the 1710 Act was then, and remains, a cultural quid pro quo. Parliament, to encourage "learned Men to compose and write useful Books", provided a guaranteed, if finite, right to print and reprint those works so composed. The legislators were not concerned with the recognition of any pre-existing authorial right, nor were they solely interested in the regulation of the bookseller's market.

And yet, the RIAA laywers make a big stink about Locke's impact on the Statute of Anne. They ignore that many of his ideas were rejected by Parliament, and instead pretend that he more or less wrote the damn thing.

In the 1690s, Parliament refused to renew
the Stationers’ Company’s printing monopoly, and authors and booksellers in the
newly competitive industry began pressing
for formal protection for their works. Although he strongly opposed the
Stationers’ Company’s monopoly, John Locke himself described literary
publications as “property” and argued in a 1694 letter to Parliament that
formal publishing rights should last for the life of the author plus seventy
years.

In 1710, Parliament enacted the Statute of Anne, which formally
granted authors of existing works a 21-year exclusive publication right
and authors of new works a renewable 14-year exclusive right.

Yes, because during the debate over what to do about this, Locke referred to publishing rights (not copyright, by the way) as property, these lawyers claim it was a key basis for copyright. Except... they leave out the part where Parliament rejected most of Locke's suggestions and went in a different direction. It's the details like this that matter.

Furthermore, much of the argument in the paper is that Locke believe copyright is some sort of "natural right," rather than a utilitarian issue (i.e., for the betterment of society). And yet, when you look at all of Locke's comments on the matter, even when he's making what appears to be a natural rights argument, it's really a utilitarian argument in disguise. The RIAA lawyers accidentally make that very point when they argue that Locke would have supported copyright more than traditional property (while ignoring the fact that he quite obviously did not) because it would "increase the pie." But, of course, increasing the pie is a utilitarian argument. Which is exactly what Locke was making when it came to such works, contrary to the claims of the authors of the paper.

The paper then makes the further leap that since the US's Copyright Clause had similarities to the Statute of Anne, that the founders also believed wholeheartedly in the (already not really accurate) idea that he thought copyright was property. Derek Bambauer, in talking about just how inaccurate and ridiculous the RIAA paper is, reminds us of Dotan Oliar's incredibly detailed paper on the origins of the US Copyright Clause, which should be required reading for anyone arguing about this clause and what it actually means. As that paper shows in much more detail than anything the RIAA lawyers wrote, the RIAA's claims are, well, bunk. Oliar looks at the historical record of the various proposals put forth for the copyright clause, and notes that Congress explicitly rejected the ones that were more based on a "natural rights" or "property rights" view, and like the English Parliament before them, chose instead to support a limited bill for the purpose of promoting progress, rather than any sort of property right.

Specifically, the study of the Convention’s record provides three indications
that the Framers intended the Progress Clause as a limitation on Congress’s
intellectual property power. First, Madison and Pinckney’s initial proposals to
vest patent and copyright powers in Congress were plenary and did not include
language relating to the promotion of progress in science and useful arts. Had the Framers been content with such plenary patent and copyright powers, they
would have likely adopted them as proposed. The Framers’ choice not to adopt
the plenary proposals, but rather to subject their exercise to specific ends, tends
to prove that the Progress Clause was added as a limitation.

That paper, unlike the RIAA paper, is quite detailed and thorough (and actually acknowledges the views of those who have argued otherwise, before explaining why the evidence suggests they're wrong). Reading through the details there, you're left with a pretty convincing case that the majority of framers of the Constitution were not looking to secure some sort of "natural right" or "property right," but to explicitly to use the "promote the progress" clause to limit Congress' ability to do damage with copyrights and patents. Yes, there were some who viewed copyright as a natural rights issue, but it is clearly not the majority, or else they wouldn't have rejected putting such language forward. Besides, the fact that in a large group of politicians, you can find a few to make a crazy argument does not mean that the entire body agreed with those views. Can you imagine what these lawyers must think of Congress? One Rep suggests raising taxes and they must think that, clearly, the entire country supports raising taxes. Because that seems to be the only way their argument in this paper makes any sense.

The RIAA paper also brings up the UN's declaration on human rights, arguing that its Article 27 shows that it is a widespread belief that copyright is a natural property right. Except, as we've discussed in great detail, this is not what the declaration on human rights actually says. Not only does that same clause argue that "everyone has the right to freely participate in the cultural life of the community, to enjoy the arts," but official commentary and associated declarations also, explicitly, note that the rights being discussed do not equate to copyright and should not be equated with copyright. Not surprisingly, the RIAA paper ignores all of that.

It also ignores some key US cases, which flatly reject this idea, including the 1834 decision in Wheaton v. Peters -- considered the first real copyright case in the Supreme Court, in which the Supreme Court comes down pretty firmly against the idea of copyright as a natural right, and establishes that it is a creature purely of statute. In fact, the court there refers back to the Statute of Anne as well, and notes that there, too, they have rejected the natural rights argument for copyright.

No such right at the common law had been recognized in England, when the colony of Penn was organized. Long afterwards, literary property became a subject of controversy, but the question was involved in great doubt and perplexity; and a little more than a century ago, it was decided by the highest judicial court in England, that the right of authors could not be asserted at common law, but under the statute. The statute of Anne was passed in 1710.

The court then went much further in noting that the Constitution explicitly presents limits on copyright, and there is no evidence that it was establishing the recognition of a natural right:

That congress, in passing the act of 1790, did not legislate in reference to existing rights, appears clear, from the provision that the author, &c. "shall have the sole right and liberty of printing," &c. Now if this exclusive right existed at common law, and congress were about to adopt legislative provisions for its protection, would they have used this language? Could they have deemed it necessary to vest a right already vested. Such a presumption is refuted by the words above quoted, and their force is not lessened by any other part of the act.

Congress, then, by this act, instead of sanctioning an existing right, as contended for, created it. This seems to be the clear import of the law, connected with the circumstances under which it was enacted.

This case is widely known to copyright scholars. It seems rather stunning that these RIAA lawyers (or the CFIF, which published the paper) would be ignorant of it. Thus, it's not difficult to conclude from all of this that the authors of the paper did not undertake a scholarly look at whether or not copyright was long viewed as a natural right and thus, as property, but rather that they cherry picked a few quotes out of context, and then pretended those quotes had much more impact than they really did.

from the like-exactly-the-opposite-of-the-talking-points-no-one-believes-anyway dept

Every time the major players in the copyright industries kick off another push for more legislation, enforcement or protection, they make grandiose claims about how much IP-intensive industries contribute to the economy. "Millions of jobs generating billions in revenue, a small portion of it taxable!" they shout proudly in the direction of the nearest legislator or ICE agent. If IP protection was weakened in the slightest, the nation's entire economy would likely collapse.

IP is innovation, according to these industries. Weak IP laws lead to weak economies. This entertainment industry trope, filled with questionable numbers, is used to justify the endless push for draconian IP enforcement and stiff legal and civil penalties for infringement. But evidence to the contrary continues to mount, punching holes in the IP industries' favorite narrative.

Yesterday, Reuters news service ran an article about a rating of eleven countries based on their enforcement of intellectual property rights. The index was prepared at the behest of the U.S. Chamber of Commerce by a group called The Global Intellectual Property Center, and it ranks the U.S. at the top of the list in terms of strong IP protection (23.73 points on a scale from 0 – 25). But what is interesting is who scored lowest (out of the eleven countries that were ranked). The four “worst” countries for providing the strong IP protection important to the Chamber of Commerce were the four countries known as BRIC — Brazil, India, Russia and China.

So what else do we know about these four nations? In fact, why were they originally grouped together under the acronym BRIC? The answer is that the term was coined because these four countries were the fastest growing emerging economies, showing growth rates between 5 and 9 percent in their gross domestic products (compared with US growth averaging 3.2 over the past 65 years). The source of these averages for the BRIC nations is this report from PriceWaterhouseCoopers, dated February 2012, which contains this conclusion: “We expect the BRIC economies to continue to drive world economic growth in 2012.”

So the four countries driving economic growth are also the four countries with the weakest IP protection regimes, amongst those 11 rated by the Chamber of Commerce report. Doesn’t the conclusion seem simple, that weaker IP enforcement is part of the picture for economic growth?

Now, Smith points out that this connection is nothing more than correlation, but a few conclusions can be drawn. A lack of solid IP protection does not necessarily doom economies to subpar performance and increasing IP protection does not necessarily lead to a robust economic future. IP industries have relied on the credulity of legislators to pass off the "stronger IP enforcement results in more innovation, jobs, etc." argument, usually packaged with the "no copyright protection means no incentive to create" lie that conveniently ignores years and years of creation pre-copyright and thousands of new artists surfacing at a time when piracy is "rampant."

There's tons of evidence that contradicts the rationale driving the "need" for more IP enforcement. Smith goes on to list a few examples of artists thriving with little or no protection, including "Nollywood," Nigeria's film industry, which has exploded over the last 20 years despite truly rampant infringement, and K-pop star Psy, who's looking at $8 million earned without having to rely on the protections of copyright. So, as has been suggested here time and time again, the real "enemy" of innovation and creativity ISN'T piracy, it's the industries themselves.

[I]P protection is, at least a double edged sword. Piracy can reduce revenues, but it also helps to create distribution channels and grow markets. So creative industries seeking to grow in the digital economy need to do more than try, futilely, to eradicate piracy, they need to seek ways to shape their markets and their marketing to exploit the audiences that it can create.

"New business model," anyone? This has been pointed out again and again. Attempting to defeat something that it at least partially beneficial is, at the very least, short-sighted. On a larger scale, battling piracy with enforcement and legislation rather than by increasing options and providing better services is more than short-sighted -- it's dangerously self-destructive. There's very little evidence that enforcement efforts are making any real dent in file sharing -- certainly nothing that would justify the time, money and effort expended.

Smith concludes his post with these thoughts:

So, slippery as such conclusions can be, I feel comfortable with these two assertions. First, creative people and creative industries can thrive without strong IP protections. In fact, if you are continually looking to the government to increase IP enforcement on your behalf, your industry is probably already in bad trouble. Second, it is perfectly possible to over-enforce IP rights to the point where creativity and economic growth are stifled. There is good evidence that the US has passed that point, and the example of the BRIC nations should suggest to us that we need to reverse our course.

At this point, the legacy industries are too firmly entrenched to expect any sort of nimble maneuvering or backtracking on existing IP laws. A suggestion for just such a reversal, briefly posted by the Republican Study Committee, met a swift, ignoble death at the hands of Hollywood's lobbyists, who also pressured its author, Derek Khanna, out of a job. No matter how much evidence contrary to the copyright industries' talking points is presented, the response is always the same: more enforcement, legislation and protection. It will take a severely weakened entertainment industry to give any quarter, but as long as its aims remain self-destructive, that day seems inevitable.

from the privacy-before-piracy dept

We recently covered the latest attempt by Voltage Pictures to identify alleged Canadian filesharers in order to launch one of their infamous copyright shakedown schemes. Rather than target one of the big ISPs, they made a list of thousands of IP addresses from TekSavvy, an independent service provider, and sought a court order forcing them to identify the users behind the addresses. TekSavvy has been admirably transparent and communicative about the issue, and was clear from the start that it would not release any information without a court order. On Monday, the court granted TekSavvy's request to adjourn until January so it could notify its customers and give them a chance to oppose the motion that would reveal their identities. However, TekSavvy has also been very clear about one thing: it won't be opposing the motion itself, and it's left a lot of customers and commentators wondering why.

Nobody would expect TekSavvy to personally defend each customer against accusations of infringement, and the company's statements so far seem to hinge on that idea as the reason it's not going to oppose Voltage's request in court. On the surface that might seem reasonable, but in fact it sidesteps the real issue: TekSavvy may not be responsible for its users' defence against infringement lawsuits, but it is responsible for protecting its users' privacy—and there are plenty of serious privacy issues with Voltage's motion that need to be addressed long before we get to the point of determining the actual guilt or innocence of individual users.

This isn't hypothetical. Howard Knopf explains the key legal comparison in this case—a 2004 attempt by BMG to get information on a mere 29 users from much larger ISPs. Not only did the ISPs oppose the motion, they won, and established important precedents in doing so.

Despite Teksavvy’s openness concerning this issue, questions are still bound to arise why Teksavvy is not actually opposing this disclosure motion in 2012, as Shaw and Telus actively and successfully did in 2004, with Bell and Rogers taking a similar if less vigorous position. In this regard, it is interesting to compare Voltage’s
material with the BMG et al material filed in 2004 that was rejected by the Federal Court and Federal Court of Appeal at that time as inadequate in a very comparable situation, as a result of which we now have clear
and binding appellate case law.

...

The law about all of this was clearly laid out by the Federal Court of Appeal in 2005. Here is a very balanced discussion of this presented by myself and one of my worthy opponents in that case, Richard Naiberg. The key criteria for potential success in a disclosure motion such as this is that there must be substantial, admissible, non-hearsay, and reliable evidence in the form of affidavit material and at least a bona fide case.

A key intervener in that case was the Canadian Internet Policy & Public Interest Clinic, which fought hard for the privacy of the Doe defendants. CIPPIC also sent a letter to the court regarding this recent Voltage motion, requesting the adjournment that was granted Monday. That letter focused heavily on the factors established in the BMG case, and when you run through those factors, you begin to see why this is a privacy issue before it's an infringement issue. The court's disclosure test was designed to ensure that customer info isn't released without a solid reason—and perhaps the most important requirement is that there be a bona fide claim, further clarified as a true intent to pursue further action based on the disclosure, and no ulterior motive. When it comes to a shakedown operation like Voltage's, everyone knows that the exact opposite is true, and CIPPIC's letter (pdf) cites the company's past (while explaining precisely what a "copyright troll" is) to make this point:

On the question of bona fides, the plaintiff has identified literally thousands of John Does
and Jane Does. BMG v. Doe involved only 29 potential defendants. It is worth asking the
plaintiff if it holds a bond fide intent to bring 2000 actions for copyright infringement. As
will be noted below, this plaintiff has a track record in the United States of demanding
subscriber data of internet service providers for the purposes of demanding exorbitant
payments to settle under threat of litigation, with no bona fide intent to prosecute such
litigation. In CIPPIC’s view, this scheme does not meet the requirements of the need to
show a bona fide claim, but instead is evidence of another purpose.

...

the applicant has in the past engaged in similar mass litigation in the
United States. The applicant’s business model for such litigation has earned it the label of
“copyright troll”. Trolls’ business model involves alleging that consumers are liable for
copyright infringement, and demanding compensation under threat of litigation. The
compensation demanded invariably grossly exceeds the damages a troll might expect if
the troll were to actually litigate and obtain judgement and a damages award. However,
such compensation does not typically exceed the cost to a defendant of defending the
action. Enough defendants will choose to pay rather than defend to make the scheme
profitable to the troll. The troll typically never litigates through to a judgement, since the
costs of doing so would render the scheme as a whole less profitable. The troll’s business
model, thus, is an arbitrage game, exploiting judicial resources to leverage defendants’
fear and the costs of defending into a revenue stream. And, of course, no part of these
revenues finds its way back to the court to offset costs borne by the taxpayer as the
judiciary plays its inadvertent role in this scheme. In CIPPIC’s view, such a purpose is
improper and bars the applicant from establishing a bona fide claim.

Not only that, as the letter notes, Voltage's motion accuses the users of commercial infringement—a much higher bar carrying much higher potential fines. This accusation seems completely unsupported by the evidence (which amounts to little more than "these IP addresses were connected to BitTorrent swarms") and even less likely to qualify as a bona fide claim.

Since we've been seeing lots and lots and lots of US judges slamming copyright trolling operations and dumping their cases, there's clearly an opportunity here for Canadian courts to smack down this practice before it gets off the ground—or re-assert their earlier smackdown, anyway. But the only way that can happen is if someone actually opposes Voltage's request (CIPPIC's letter was just supporting a delay). TekSavvy is still insisting it won't be them; CIPPIC might seem the logical candidate, and I'm sure they'll do what they can, but it's unclear how much they will be allowed to intervene if none of the directly-involved parties put up a fight. The only other option is the customers themselves, once TekSavvy notifies them—but, of course, the whole point of this scheme in the first place is that most people can't afford to take on a complex legal battle.

So will Voltage waltz right past the clearly-established test for the disclosure of private information? If TekSavvy doesn't do anything, they just might.

from the copyrights-and-patents-together dept

Via TorrentFreak we learn of a patent application from Robert Steele, of Digital Rights Corp., seeking to patent a system to basically automate copyright trolling. It's an application that was just published, so it's really meaningless. Who knows if the USPTO will approve it, but the patent is pretty simple. Here's the key claim:

A system for resolving an act of copyright infringement, comprising: an infringement module configured to identify an infringing computer, wherein the infringing computer includes a computer associated with an infringement event; an identification module configured to identify an ISP associated with the infringing computer; a notification module configured to notify the ISP that the infringing computer is associated with the infringement event; a receiving module configured to receive a redirected request for access to Internet content, wherein the request for Internet content has been redirected by the ISP; and a generation module configured to generate a redirect webpage, wherein the redirect webpage includes a link associated with a settlement webpage that includes a settlement offer to resolve the infringement event.

This seems ridiculously broad, as do so many software-focused patents these days. Of course, if the patent did get awarded, it would be interesting to see what happened next. Would copyright maximalist copyright trolls start complaining about too much enforcement on the patent side?

from the go-julie dept

Some fantastic news from EFFland, where Mark Cuban and Markus 'Notch' Persson have agreed to give EFF $250,000 each in order to fund its latest efforts to stop bad patents. This includes naming EFF attorney Julie Samuels "The Mark Cuban Chair to Eliminate Stupid Patents." This is a job title that only a few people deserve and, knowing Julie, she's one of them. Over the years, EFF has done some really great work on patents, but they've often seemed like a backburner issue compared to other things -- so we're excited to see what comes next.

from the pining-for-the-fjords dept

In case you weren't sure yet, ACTA is now pretty officially dead in the EU. While it was mostly dead back in July, when the EU Parliament vociferously rejected ACTA, the EU Commission, who had helped negotiate the treaty, still held out hope that it would be vindicated by the EU Court of Justice. As you may recall, to try to appease those arguing against ACTA, the EU commissioner with responsibility for the treaty, Karel De Gucht, had submitted the agreement to the EU Court of Justice for a determination on whether or not it really went against EU laws, and he had insisted that even with the Parliament's rejection that he would push forward with that case.

Except... months later, the EU Commission has quietly dropped its request for the EU Court of Justice to weigh in, more or less putting that final nail in the coffin for ACTA in the EU. It's about a year late, but it appears that the EU Commission has finally realized that ACTA was a mistake for Europe.